Under the Dome

Jobless bill moving to Senate floor

A bill that would restructure the state's unemployment system is on track to be debated on the Senate floor Tuesday after winning a committee endorsement.

The Republican-backed bill sailed through the Senate Finance Committee Wednesday, winning approval by a voice vote.

Wednesday's approval came after two amendments proposed by Democrats that were aimed at easing the negative effects on the unemployed were rejected. The amendments were similar to measures that also failed to gain traction in the House, which approved the bill Tuesday.

Gov. Pat McCrory has signaled that he is ready to sign the bill into law if the Senate follows the House's lead, as it is expected to do.

Republicans argue that the bill is strong medicine that is needed to prevent "deadbeats" from taking advantage of the state's generous unemployment benefits and to minimize the escalation of unemployment taxes paid by businesses. The higher taxes, they contend, are hurting industry's ability to create jobs and are a deterrent to companies seeking to relocate to North Carolina.

Democrats counter that jobless workers already are struggling under the current benefits system and that a major reduction of those benefits is unfair and unwarranted.

To date there has been no comprise between the two positions. Instead, the Republicans have bulldozed any and all opposition.

The Republican proposal, which has the strong support of the potent N.C. Chamber, was triggered by the $2.5 billion the state owes the federal government, money it began borrowing to cover the first 26 weeks of jobless benefits when unemployment soared during the recession. The state continues to borrow money, about $25 million a week, to cover those benefits.

That debt has triggered higher federal unemployment taxes for businesses, which are rising at a rate of $21 per employee each year until the debt is erased. Individuals don't pay unemployment taxes; businesses pay both federal and state unemployment taxes.

The bill would accelerate paying off the debt by slightly raising the unemployment taxes that most employers pay, adding to the pool of employers that pay into the state unemployment trust fund and significantly cutting benefits.

Maximum benefits paid to unemployed workers would be cut by roughly one third, from $535 a week to $350. The bills also would reduce the maximum weeks of benefits from 26 to a sliding scale of between 12 and 20 weeks, depending on the unemployment rate.

Because the bill calls for a cut in state benefits starting July 1, it also cuts off extra federal benefits for unemployed workers. Currently federal emergency benefits kick in after state benefits expire, but a recent federal relief package cuts off the extra benefits to states that don't maintain their weekly benefit amounts.

One of the amendments that failed Wednesday, proposed by Minority Leader Martin Nesbitt, would have delayed the cut in maximum benefits until Jan. 1 in order to maintain the federal emergency benefits.

The second amendment, offered by Sen. Mike Woodard, a Democrat from Durham, called for restoring unemployment benefits after the debt to the federal government is paid off. Under the current bill, the cuts to benefits are permanent even though the higher federal unemployment taxes end when the debt is erased.

"One is temporary, the other should be temporary," said Sen. Josh Stein, a Wake Democrat.

But Rep. Julia Howard, a Mocksville Republican who sponsored the bill in the House and presented it to the committee on Wednesday, countered that the bill creates a legislative oversight committee that could deal with such issues down the road.

Staff writer David Ranii

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